In July 2020, we asked nearly 200 professionals in the private equity industry to tell us about their experiences with buy-side advisory firms. More than 85% of the respondents work with buy-side firms either on a retained or contingent basis. We received a strong number of responses to our survey, and this feedback will help us improve the quality of service we provide to our current and existing clients.

The Q&A below highlights a few of the questions we asked:

Question: Does your team plan on retaining any new buy-side firms at some point in the next six months?

Answer: Over 50% of respondents indicated they will likely hire one or more new buy-side firms in the next six months. While we’ve witnessed a slowdown in middle market M&A due to Covid-19, these responses indicate that investors anticipate pursuing acquisitions with second half of 2020.

Question: Overall, how would you describe your team’s experience with buy-side firms?

Answer: We received mixed responses to this question, with 32% indicating they have had “very positive experiences” with buy-side firms, 36% indicating there is “room for improvement,” and 26% indicating they have had “some negative experiences.”

Question: What are some issues or “pain points” you have experienced when working with buy-side firms?

Answer: More than 75% of respondents indicated that the number of strong opportunities presented to them by the buy-side firm was an issue. Other common responses to this question include comments related to the communication between the advisor and the client, the quality of the summaries / overviews on potential opportunities, and the strength of the prospect list.

Question: If your team retains a buy-side firm, for how long do you typically work with the firm?

Answer: 70% of firms we reached out to informed us they typically work with a buy-side advisor for more than 6 months. This is line with what we expected to see – many of the searches we work on extend beyond six months, especially when our clients are looking to make multiple acquisitions.

Question: Aside from using Email, do you think sharing documents between your team and a buy-side firm would be improved by using any of the tools listed below?

  • DropBox
  • Box
  • Asana
  • SharePoint
  • Microsoft Teams
  • Slack
  • No, email works best

Answer: A majority of respondents feel that utilizing a cloud-storage platform (mainly DropBox) could improve the communication between their team and the advisor. However, about 30% indicated they prefer to use email as their primary communication method. We are happy to utilize whatever tools work best with our clients, and we are always looking to improve communication through software.

Question: Does your team allow buy-side firms to invest a portion of their success fee into a transaction?

Answer: More than 80% of respondents indicated they do allow success fees to be rolled into a transaction, though the decision is dependent on a variety of factors (existing relationship with advisor, deal structure, and transaction size, among others). We are always open to rolling a portion of our success fees into the transactions we advise on.


In Conclusion….

We conducted this survey to hear about firms’ experiences with buy-side advisors. We at Normandy Advisors are constantly looking for new ways to provide a better service to our clients, and we greatly appreciate the feedback and responses we received from everyone that took the time to complete this survey!